If any step in buying a home is confusing, complex, or tedious, it's figuring out how to get the right kind of financing. However, since the Internet has made it relatively easy to learn about, shop for, and secure great mortgages, the frustration factor of getting financing has been mercifully reduced.

The first step is to learn how home financing works. In a nutshell, the process involves the following steps:

• Checking your credit history
• Getting prequalified
• Shopping for loans
• Getting preapproved

If any step in buying a home is confusing, complex, or tedious, it's figuring out how to get the right kind of financing. However, since the Internet has made it relatively easy to learn about, shop for, and secure great mortgages, the frustration factor of getting financing has been mercifully reduced.

The first step is to learn how home financing works. In a nutshell, the process involves the following steps:

• Checking your credit history
• Getting prequalified
• Shopping for loans
• Getting preapproved
• Checking Your Credit History
• If your credit report has mistakes or other blemishes, your credit rating will suffer, and as a result, you will pay higher interest rates and may even be unable to secure financing.

Before you apply for preapproval, you're well advised to make sure your credit report (and therefore credit rating) is as accurate and positive as possible. You want to check your report because it's estimated that 20% of credit reports have significant mistakes (the Consumer Union says that 48% are inaccurate).

The first step is to get a copy of your credit report. There are 3 major credit bureaus, but since they don't share information, it pays to make sure that each report is error-free. Each report will cost around $8, and a merged report from all 3 is around $30. You can get a merged 3-agency credit report online from ConsumerInfo.com or you can call the credit bureaus directly:

• Equifax: 1.800.997.2493
• Trans-Union: 1.800.888.4213
• Experian: 1.888.397.3742

To fix errors on your credit report or if you would like to improve any negative records, try the Consumer Credit Counseling site, which gives advice on how you can either remedy errors or start to establish a better track record with creditors.

When preparing to buy a home, you have to estimate how much home you can afford. Similarly before you apply for financing, you should allow a lender to size up how much mortgage you can afford. Using financial information that you provide, prequalification is a lender's analysis of your general position as a borrower or, in other words, an estimate of what you can afford.

Besides giving you an even better idea of what you can afford, getting prequalified helps you make an informed application for your mortgage preapproval and is evidence to Realtors that you will be able to get financing.

The terms of your mortgage will probably be the biggest determinant of the size of your monthly payment, so you'll want to shop around. The main points to resolve are figuring out what kind of loan you want, who you want to provide it, and for how long you want it (most are either for 15 or 30 years).

When shopping for loans, remember that the interest rate isn't the only cost involved with a loan. The size of the down payment as well as "points" (or prepaid interest) and other fees can significantly alter the cost, especially the upfront cost.

There are two kinds of Web sites that help with online loan hunting. First, there are the straight shopping sites that let you enter your financial information and search for loans.

The second type of sites are loan referral sites that don't offer loans but organize and streamline loan hunting by creating loan marketplaces or presenting the lender options in your area.

Getting preapproved is a firm commitment from a lender to loan you up to a maximum amount without a specific property being identified.

Preapproval is a useful step because you go through the financing process before making an offer on a home, so the time required for the process itself won't jeopardize your offer. And once you are preapproved, closing the loan is quick, depending only on a satisfactory appraisal and title report of the home.

To get preapproved, you apply for a loan program, submit an application, and provide financial information.

Getting preapproved is a firm commitment from a lender to loan you up to a maximum amount without a specific property being identified.

Preapproval is a useful step because you go through the financing process before making an offer on a home, so the time required for the process itself won't jeopardize your offer. And once you are preapproved, closing the loan is quick, depending only on a satisfactory appraisal and title report of the home.

To get preapproved, you apply for a loan program, submit an application, and provide financial information.

• The Buying Process
• What Can You Afford?
• Buy vs. Rent
• Finding a Home
• Getting Financing
• Closing the Deal